FRAN KELLY, PRESENTER: Up next is our guest, the Leader of the Government in the Senate and the Employment Minister, Eric Abetz. It's the moment of truth for the Government and its budget this week when the new Senate sits. The Opposition is reminding the Coalition of the past.

ANTHONY ALBANESE, OPP. INFRASTRUCTURE SPOKESMAN: What's extraordinary is the difference in the rhetoric before and after the election. Before the election, Tony Abbott and Christopher Pyne and others were all saying, "No negotiations with any crossbenchers, we're going to be the Government, not talk to anyone."

Remember that they described the fact that we had to negotiate our policies through, our program through as being an "illegitimate government". Well, if the last government was illegitimate because it had to negotiate with crossbenchers, so is this one.

Eric Abetz, welcome to insiders.

ERIC ABETZ, GOVERNMENT SENATE LEADER: Good morning.

FRAN KELLY: Minister, we're told you're leading the charm offensive for the Government. How are you turning on the charm?

ERIC ABETZ: Look, I'm doing my best to convince the crossbenchers of the soundness of the Government's approach to the various issues that we're facing, and of course, the first issue is to get rid of the carbon tax, which is having a real impost on Australian's cost of living and it's destroying jobs with no benefit to the environment.

So, we would encourage the crossbenchers to join us on that exercise, and then as we go down the track, we will be discussing with them each of our policy positions and of course we'll be listening respectfully to their input.

FRAN KELLY: Well, it's early days I know, but it seems you haven't charmed the new Palmer United Party senator from your own state, Tasmania, Jacqui Lambie. She's described you - in the papers today, she's described you as a weak man and says the Liberal senators in Tasmania are a little men's group that haven't achieved anything for Tasmania.

ERIC ABETZ: Well, look, I'll let Jacqui Lambie explain those comments. I will seek to disabuse her of those views of myself and of my colleagues and I'll leave it at that. What I invite everybody in the Senate to do is rather than provide gratuitous character assessments, to look at the issues, look at the policies and ascertain whether they are good for our nation or not and not be sidetracked by these other considerations.

FRAN KELLY: You are going to have your work cut out for you, though, aren't you? Jacqui Lambie again has described the Prime Minister as a "political psychopath". Another crossbencher was quoted as saying he's prepared to use blackmail to get his way in the Senate. At least a couple want tax rates cut to 20 per cent so they won't support any new taxes or levies. That means no fuel tax increase, no Medicare levy. These people might be hard to wrangle.

ERIC ABETZ: Look, clearly a lot of them have come into the Senate with a feisty demeanour and an agenda and we will work with them to ascertain what we can achieve to the betterment of the Australian economy and the Australian community. That is the role and task of every single senator, and at the end of the day, we do need to have a landing on some of these issues and we will be in active discussions with them to get the best possible result for the Australian nation, keeping in mind that as we speak we are borrowing one thousand million dollars a month just to pay the interest on the existing borrowings, completely unsustainable, it's inter-generational theft and economically irresponsible.

FRAN KELLY: Minister, there's a couple of positions already out there from the crossbenches, if I can go through them. The Liberal Democrats senator David Leyonhjelm already putting a trade on the table, suggesting he could support the Government's paid parental leave scheme, which he's opposed to generally, if the Government agrees to deregulate the childcare centre to the point where people can provide childcare for their neighbours, say, in informal arrangements, charge them without needing credentials. Is that blackmail or is that an acceptable level of horse trading, in your view?

ERIC ABETZ: Senator Leyonhjelm has put forward a proposition. It's not within my portfolio responsibility. Let's see what the details of that proposal are and we'll ascertain whether or not we as a government believe it to be a responsible position. I believe that some accreditation may be of benefit, but I won't get on the sticky paper of somebody else's portfolio area. Suffice to say ...

FRAN KELLY: Alright. Let me go to one in your portfolio area, because the Family First senator Bob Day, he wants some change to IR laws. He won't support the Government's Newstart changes unless the Government agrees to allow young job seekers to not be bound by the minimum wage if they don't want to be. He said they should be allowed to work for less than the minimum wage. Now you are the Minister for Employment and IR. Do you agree with him?

ERIC ABETZ: I've seen that proposal. I believe it's an interesting one and what I would invite Senator Day to do is to submit that proposal to our Productivity Commission inquiry into the Fair Work Act framework and regime and see whether or not it has merit. Our view is that the wages that are set should be determined by the independent umpire, the Fair Work Commission, but Senator Day here has a policy proposal which should be put into the open marketplace and considered.

FRAN KELLY: Now it does look as though you're going to have better luck with the carbon tax. The Government says it wants it repealed this week. The Senate's already agreed that the tax come on and that vote come on next week on July 14th. Are you going to move to have it brought on this week? When do you want the vote?

ERIC ABETZ: As a government, we went to the election over six months ago with one overarching pledge, which was to repeal the carbon tax. The Labor-Green majority, in their absolute resentment of the Australian people's decision of 7th September last year, have frustrated that agenda.

We are hopeful that the crossbenchers will see the benefit in repealing the carbon tax because that is the best thing we can do immediately to reduce the cost of living and to ensure that this job-destroying tax is removed. It's a blot on our economic landscape and it does nothing for the environment and I think the crossbenchers may well be listening to the Australian population in that regard, but having said that, I take nothing for granted.

FRAN KELLY: But are you going to bring it on this week? I'm wondering if you're going to bring it on this week because I'm wondering why try and thwart what the Senate's already agreed? What difference does a week make? Is it about getting a headline of a win for the Government because you haven't got many headlines about a win on your budget yet?

ERIC ABETZ: This is about a win for the Australian people that want to see their cost of living reduced and they want to see the job-destroying carbon tax removed as quickly as possible.

And might I say, trying to defer it was the last hurrah of the Labor-Green majority in the Senate, which no longer represents the will of the Australian people as of 7th September, but they abused their numbers in the Senate to try to defer consideration of the carbon tax.

We are committed to putting it up. We said after the - before the election that the very first item of business we would put to the new Parliament was the repeal of the carbon tax. We did that over six months ago. It therefore is absolutely consistent for us to put it up as the first item for the new Senate.

FRAN KELLY: And just before I leave matters in the Senate, I notice the Archbishop of Canberra Christopher Prowse yesterday issued a statement urging you to reconsider the change you've made to the regulations which means that cleaners of Commonwealth buildings are going to be $5 an hour less off because of a change you, as the minister, have made to something passed by the Senate. Why were you so determined to take this pay hike, $5 an hour, away from some of the lowest-paid workers in the country? The "new Aussie battler", is what the bishop calls them.

ERIC ABETZ: Well, your introduction to the issue suffers from the same misconceptions as His Grace's comments and I would invite Hs Grace, if he actually has something to say to me, to actually talk to me rather than through the media. But having said that, the program that was put in place by Mr Shorten just a year or so before the Government fell, was designed to be a lift for the union, not for the workers.

FRAN KELLY: Well the workers are the ones who got $5 an hour.

ERIC ABETZ: No, all the workers are under enterprise agreements that remain in place. Their working conditions cannot be changed at all. They are entitled to the ongoing wages. Everybody knows that, and with respect, a little bit of research would have indicated that to be the case.

But what we have, for example, is that cleaners that clean the Comcare building in Canberra are to be paid more than the cleaners that clean the Comcare offices anywhere else in Australia. Cleaners of Commonwealth offices in Penrith are paid a different rate than the cleaners in Parramatta.

Now, how that is fair and reasonable nobody can explain and what we have said quite clearly is that there should be a level playing field, that any employer, any employee that has gotten existing enterprise agreement will have to continue to abide by that agreement and that is the law of the land and we have not changed anything in that regard, and therefore, anybody suggesting that there has been a reduction in cleaners' wages as a result of our decision is simply incorrect.

FRAN KELLY: Minister, on another matter, as a member of the Government's leadership group, can you tell us now what's happened to those asylum seekers on the Indian Ocean? Where are they now?

ERIC ABETZ: Those matters are matters that are operational. I'm not going to comment on that. That is clearly within the province of my colleague, Minister Morrison, and I will leave it for him to comment.

FRAN KELLY: With respect, Minister, I think it's of interest to all of us. I mean, these people contacted Australian radio last weekend asking for help. If they are in the care of Australian Border Control, why can't the Australian people know how they're being treated? I mean, since when does our government disappear people?

ERIC ABETZ: Look, we don't disappear people, and with respect, that sort of description does you no credit. What I think every Australian will know and understand is that our professional people in the Australian Navy, in the Australian Border Protection Force treat everybody with due care and respect and according to international obligations and I have every confidence that that is being done on this occasion as well.

FRAN KELLY: But how can the Australian people have confidence if we don't know? It seems as though these people have been returned to a government from which they are seeking asylum. Malcolm Fraser has tweeted that that's redolent of handing Jews to Nazis in 1930s. How can you and our Prime Minister give the assurance that no harm would come to anyone who's been in our charge? How can we guarantee that and how can we know that to be true?

ERIC ABETZ: As I've said before, just moments ago, this is an operational matter, but I have every confidence that we will be treating these people and are treating these people according to our international obligations and there is one thing every Australian can have confidence in: that our Border Protection people will treat these people with the respect that they deserve under international law.

FRAN KELLY: I understand that, Minister, and I'm sure you do have confidence and I'm sure most Australians would have that confidence, but how can we know, because one thing we do know: there's been numerous reports now, international reports, showing that people have been returned to Sri Lanka, Tamils who have been returned, there have been a number of instances of torture - how can we know that that will not happen to these people?

ERIC ABETZ: What I would simply say is that the arrangements that are being put into place - and I'm not aware of them - will be subject to the laws that apply, and as I understand it, we have arrangements with a repatriation of people with the International Migration Office and one would imagine that our liaison with such an international body ensures that the people that are so repatriated are looked after.

FRAN KELLY: The point is, Minister, we can't know that because we don't know what's happened, so all we've got reports that these people have been asked four questions from a boat by video link in the middle of the ocean. When will the Australian Government tell us what has happened to these asylum seekers?

ERIC ABETZ: In due course these matters will be revealed, but it makes absolute sense that you do not give a blow-by-blow description in the middle of an operational matter, and I think most Australians, as they watch this program, will say, "We don't expect the Government to give a blow-by-blow description in the middle of an operational matter."

FRAN KELLY: Eric Abetz, thank you very much for joining us on Insiders.